My topic is revocation of authority under the agency and its implications.

At first I would like to

throw light on the agency. Agency is a special type of contract where the contractual rights can
be conferred and the contractual liabilities can be imposed on a stranger and the concept of the
agency was developed because one person cannot perform every transaction alone. Agency can
be defined as a contract by which an agent is engaged by the principal to act on his behalf or to
represent the principal in dealings with the outside world. i.e. “an agency relationship arises
when one person (agent) has the authority to act on behalf of another (principal). The
relationship stems from the contract. An agency established by contract gives authority, known
as “actual authority,” and is given to the agent. The word "authority" means the power of the
agent to influence the legal relations of the principal. In general, the authority of the agent is the
essence of the agency agreement.
Moving on to the topic, revocation of authority. Section 201 to 210 of the Indian contracts Act
deals with the revocation of authority under the agency
Section 201 defines Termination of the agency:
An agency can be terminated by the principal revoking his authority, or agent renouncing the
affairs of agency; or by agency's activities in progress; or either by the death of the principal or
the agent or by loss of mind; or by the fact that the principal is declared insolvent under the
provisions of any law currently in force for the reorganization of insolvent debtors. This section
provides some methods of revocation 1: (a) Termination by act of the parties: (i) Agreement, (ii)
Revocation by the principal, (iii) Waiver by the agent. (B) By operation of law: (i) Completion of
business, (ii) Expiration of time limit, (iii) Death of principal or agent, (iv) Insanity of principal
or agent, (v) Insolvency of principal, (vi) Destruction of the object, (vii) Dissolution of a
company, (viii) The principal or agent becomes a foreign enemy.2

Section 202 defines Termination of the mandate, when the agent has an interest in the
object: - When the agent himself has an interest in the property which is the object of the
agency, the agency may not, in the absence of an express contract, be terminated to the prejudice
of this interest. For example if A ships 1000 bales of cotton to B, who has made advances to him
on this cotton and wants B to sell the cotton and reimburse himself on the price for the amount of
his own advances. Neither A can revoke this authority, nor does it end in insanity or death.
In the case of Corporation Bank, Bangalore v. Lalitha H Holla: A power of attorney executed in
favor of an agent who registers or acknowledges the agent's / proxy's interest in the property
1
(1991) 99 PLR 1 216
Nasib Kaur v. Chanan Singh and Ors
2
Avtar Singh, Contract & Specific Relief, 747 (12th ed. 2019)
subject to the agency cannot be revoked, even if the instrument does not explicitly state that it is
irrevocable, because then the body of interest would simply authorize the agent to perform
certain actions at any time in the name or on behalf of the executor, despite the fact that the
executor revoked or annulled the power of attorney at any time, regardless of the act declaring
the power of attorney irrevocable.
Section 203: when can the principal revoke the power of the agent: - The principal may,
unless otherwise provided in the last preceding article, revoke the authorization given to his
agent at any time before the authorization has been exercised in order to engage the principal.

And I would like to cite the case of NARANDAS KARSONDAS V. S.A. KAMTAM & ANR
The facts were The complainant is an auction buyer. The respondents are Flora Cooperative
Housing Company in liquidation of mortgage mortgages (hereinafter the Company) and
Maharashtra Cooperative Housing Finance Society Ltd., a mortgage creditor (hereinafter
mortgage creditor). The company wanted to build 12 apartments in one ground floor structure
and two upper floors. The company bought plot no. 153 in Santa Cruz, Bombay, measuring 1002
square meters. The price was 1, 02 000 / Rs. The mortgage was 70,000,000 / - Rs. In 1968, the
mortgage creditor advanced a further amount of 42,000,000 / - In 1966, the builders of honest
business concluded a contract with the Construction Company. On various dates between August
29, 1967 and November 29, 1970, the mortgagee gave notice to the Company for non-payment
of the mortgage and to sell the property at public auction. The public auction was held on April
14, 1971. The request was for a break of 1, 22, 888.22 rs. The appellant was declared the bidder
who bid the most for Rs.1, 31, 001 / -.The auction buyer entered into possession on April 17,
1971. On August 13, 1971, the Company filed a lawsuit before the officer for special duties
under the Maharashtra Cooperatives Act against the auction buyer and the mortgage for
prohibiting the sale. The company received an ex-parte ban on transmission. On September 29,
1971, the temporary ban was lifted.4. After that, the Company filed an appeal against the said
order before the Court of Appeals.5. In the meantime, the appellant filed a written petition with
the High Court in Bombay.
Issue: whether the mortgagee can exercise his right of redemption after a mortgage under a
mortgage loan pledged property without the intervention of the court gives the obligation to the
pledged debtor to sell the mortgaged property at a public auction and sell it at a public auction.

Judgement: Given the fact that only during the transfer the ownership passes from one side to the
other, it cannot be considered that the pledge debtor has lost the right of redemption just because
the property has been put up for auction. The pledge debtor has the right to redemption if the sale
of the property is not completed by registration in accordance with the provisions of the Law on
Registration. Therefore the bench said that “We fully agree with the decision on Bombay
Decision of Madras Meenakshi Velu & Ors. v. Kasturi Sakunthala & Ors. (2) Which advocates
the opposite view of when the appellant's lawyer erred”. For the previous reasons, the appeal was
rejected with the costs of the defendant no. 1 and the appeal was dismissed.
Section 204 deals with Revocation or waiver may be expressed or may be implied in the conduct
of such principal or agent. The principal may not revoke the authorization given to his agent after
the partial exercise of the authorization, in respect of acts and obligations arising from acts
already performed in the agency. Illustrations (a) A authorizes B to buy 1000 bales of cotton on
behalf of A and to pay them with money A which remains in the hands of BB, buys 1000 bales
of cotton on his own behalf, in order to produce a personally responsible Price. A cannot revoke
force B with respect to cotton payments. In the case of Hariprasad Singh v. Kesho Prasad Singh:
When the agent carries out his activities even after his authority has been revoked by the
principal, the latter cannot recover the profits that the agent could make in this company. The
agent cannot claim remuneration for a period subsequent to the dismissal

SOUTHERN ROADWAYS LTD., MADURAI, BYITS SECRETARY V. S.M. KRISHNAN

Southern Roadways appointed the respondent as its commission agent for carrying on its
business in Madras City. Southern Roadways took on lease a godown and put it in the possession
of the respondent for the purpose of carrying on the agency business. The agreement between the
parties provided that Southern Roadways could remove the agent at any time without notice and
upon removal, it could occupy the godown and also use the services of the employees engaged
by the agent. In the course of audit, mismanagement and misappropriation by the agent was
discovered and as a result Southern Roadways terminated the agency and took possession of the
godown and appointed another person as agent. The respondent prevented the new agent and the
appellant from carrying on the business in the godown premises. Therefore the appellant filed a
suit for injunction against the respondent. A learned Single Judge granted a temporary
injunction. On an appeal by the ex-agent, the Division Bench of the Madras High Court vacated
the injunction which was challenged before this Court by Southern Roadways. This Court
allowed the appeal.
Section 205: Compensation for revocation by the principal, or waiver by the agent: - Where
there is an explicit or implicit agreement that the agency will remain for a certain period of time,
the principal must pay compensation to the agent, or principal's agent, as the case may be, for
any prior revocation or waiver of the agency without sufficient reason. - Where there is an
explicit or implied agreement that the agency will remain for a certain period of time, the
principal must reimburse the agent or agent of the principal, as the case may be, for any previous
agency for revocation or waiver without sufficient cause
SHANTI BUDHIYA VESTA PATEL V. NIRMALA JAYPRAKASH TIWARI

"The original appellant, Budhiya Vesta Patel, was the predecessor for the sake of the present
appellants. Budhiya Vesta Patel was appointed keeper by a certain RK Tiwari, who had been
growing weed on the costume property since 1954-1955, to look after the property of the
combination and for this, a Kachcha shed on the property of the combination was provided to
him.

Section 206: Notice of revocation or renunciation: - Such revocation or waiver must be given
reasonable notice, otherwise the damage caused by the principal or agent, as the case may be, the
other must compensate each other
Section 207: Revocation and waiver may be express or implied: - Revocation or waiver may
be expressed or may be implied in the conduct of such principal or agent. Revocation or waiver
may be expressed or implied in the conduct of such principal or agent. "Illustration A authorizes
B to hand over the house to A. Then A leaves him alone. This is an implicit revocation of B's
authority and A gives authority to B to leave, A's house. Then A leaves it alone. This is an
implicit revocation of B's authority. "3

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Indian Contract Act, 1872, §207
Section 208: the termination of the authority of the agent takes effect as to the agent, and as
to third parties: - Termination of the agent's authority shall have no effect in respect of the
agent before it becomes known to him, or, in respect of third parties, before he learns of it.
Explain using illustrations.
Illustrations (a) A orders B to sell the goods for him and agrees to give B a commission of five
per cent on the price the goods charge. A subsequent letter revoked B.'s authorization. B after
sending the letter, but before receiving it, sells the goods for 100 rupees. The A and B engaged in
the sale are entitled to five rupees as a commission
Section 209: When the agency ceases to die or the cessation of bad faith, the agent is obliged to
take all steps necessary on behalf of the representative of his main deceased to protect and
preserve the interests entrusted to him

Section 210: Termination of the Authority of a Sub agent: - Termination of the agent's
authority results in termination (subject to the rules contained herein regarding the termination of
the agent's authority) by the authorization of all sub-agents appointed by him. 4 Section 210
provides that the termination of an agent's authority is equivalent to the termination of all sub-
agents appointed by him

Finally i would like to say Conditions for the termination of the agency

 The premature termination of agency by either of the parties without sufficient cause
should compensate the other.
 The termination of the agency takes effect only once the communication is received.
 The termination of the agent will automatically terminate the sub-agents appointed by
him.
 Revocation of agency may be expressed or implied

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14 IND. CAS. 184
S Sundaram Iyer, Receiver And Manager, Palace Estate v. Muthuganpatigal